Rate hikes lift housing finance firms

DALAL STREET SPIKES

Stocks of housing finance companies are finding favour among investors after leaders HDFC and ICICI Bank announced a hike in lending rates.

In Thursday's trading, stocks like LIC Housing was up 9.7 per cent to close at Rs 167.30, and Dewan Housing was up 19.97 per cent at Rs 39.95.

The HDFC stock continued its upward rally to end 3.34 per cent higher at Rs 708. The counter witnessed a volume of 11.9 lakh shares on the BSE alone. ICICI Bank had recently hiked the interest rates on loans and deposits by 25-75 basis points, while HDFC has decided to hike interest rates on fixed and floating loans across maturities by 50 basis points. It will be the first hike in floating rate loans by HDFC in four years.

Analysts said rising interest rates and high demand for housing loans will improve the bottomlines of housing finance companies.